The Supreme Court had on 31 August refused to permit Malvinder (right) and Shivinder Singh to sell their stake in Fortis Healthcare Ltd. Photo: Parveen Kumar/HT

New Delhi: The Supreme Court on Thursday refused to pass any interim order permitting banks to sell shares of Fortis Healthcare Holding Pvt. Ltd pledged by brothers Malvinder Singh and Shivinder Singh.

A bench headed by justice Ranjan Gogoi said the court would hear the case on merits at the next date.

The brothers have pledged shares worth approximately Rs1,582.75 crore with Yes Bank Ltd, Rs390 crore with Axis Bank Ltd, Rs413 crore with ECL Finance Ltd and Rs55 crore with RBL Bank Ltd. Banks are trying to sell the pledged shares to get their money back.

On 31 August, the apex court refused to permit the Singh brothers, former Ranbaxy Laboratories Ltd promoters, to sell their stake in Fortis Healthcare Ltd. It also refused permission to banks with whom the Singh brothers had pledged Fortis shares to do the same. They were further restrained from disposing off any of their assets (encumbered and unencumbered) till the final disposal of the case.

Japanese drugmaker Daiichi Sankyo Ltd had on 10 August challenged a 21 June order of the Delhi high court allowing the Singh brothers to potentially sell a stake in Fortis Healthcare, on the condition that the disclosed value of their unencumbered assets would remain unaffected.

The order was passed to afford protection to Daiichi in terms of ready realizable value of assets at a later stage. As a result, the value of stake in the holding companies, namely RHC Holding Pvt. Ltd and Oscar Investments Ltd, would not change.

The value of unencumbered assets held by the Singh brothers in both these companies amounts roughly to the arbitration award of Rs2,500 crore handed down by a Singapore tribunal in 2016 in favour of Daiichi in relation to its 2008 purchase of a majority stake in Ranbaxy.

RHC Holdings has an 80.67% stake in Fortis Healthcare Holdings while Oscar Investment holds the remaining 19.33%. Fortis Healthcare Holdings in turn has a 52.5% stake in Fortis Healthcare, which runs a chain of hospitals.

The arbitral award came after Daiichi alleged that the Singh brothers had concealed crucial information while selling Ranbaxy to it for $4.6 billion in 2008. The Singh brothers are contesting the award.

Sun Pharmaceutical Industries Ltd purchased Ranbaxy from Daiichi in a $3.2 billion acquisition it completed in 2015. The case will be heard next on 25 October.